Tuesday, March 20, 2007

ETEL: Playing the BPO Boom

eTelecare Global Solutions Inc., one of the largest BPOs operating in the Philippines, just revealed plans to sell shares in the U.S. via an American Depositary Share program. The BPO will sell 5.5 million American depositary shares, each representing two of its actual shares, at US$12.50-$14.50 per ADS. Morgan Stanley and Deutsche Bank are handling the sale, in effect its IPO, which would be followed by a listing on the Philippine Stock Exchange.

After the ADS sale, the company will have 55.366 million shares outstanding. At the top end of the price range, this baby would have a market value of $401m, or about 2x revenue or 33x last year's net.

Want to find out more about a company with close to 10,000 employees and a revenue base that has doubled in only two years? Want to find out at the microeconomic level what kind of companies are driving the Philippine macroeconomy? Prospectus here.

We are a leading provider of business process outsourcing, or BPO, services focusing on the complex, voice-based segment of customer care services delivered from both onshore and offshore locations. We provide a range of services including technical support, financial advisory services, warranty support, customer service, sales, customer retention and marketing surveys and research.

Our services are delivered from four delivery centers in the Philippines and seven delivery centers in the United States, with approximately 6,800 employees in the Philippines and approximately 3,000 employees in the United States as of December 31, 2006.

Our largest clients in terms of revenue for the year ended December 31, 2006 were American Express Company, AOL LLC, Cingular Wireless LLC, Dell Inc., Intuit Inc., Sprint Nextel Corporation and Vonage Holdings Corp., together representing approximately 91% of our revenue. For the year ended December 31, 2006, our revenue was $195.1 million, our income from operations as a percentage of our revenue, which we refer to as our operating margin, was 9.9% and our net income was $12.2 million. For the year ended December 31, 2005,
our revenue was $152.2 million, our operating margin was 2.7% and our net loss was $1.8 million.

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